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Wireline broadband pricing might reduce by 40-50%

Home broadband and DTH market would see a greater role of telecom operators in future.

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MUMBAI: Home broadband, television services and integrating wireline voice is expected to move towards bundled plans by the Indian wireline broadband market. With this, ICRA predicts, the pricing is expected to reduce by around 40 to 50 per cent.

As per the ET reports, the agency said that similar to the strong growth that was observed for wireless broadband, wireline broadband subscriber base can also witness growth due to its high price elasticity and expanding demand. It also added that over the next five years, the home broadband and DTH market would see a greater role of telecom operators with a higher subscriber base and revenue generation. But the key watch-outs for the industry would be the extent of competitive intensity, and the need for capex.

ICRA sector head and VP - corporate ratings Harsh Jagnani said that the wireline broadband penetration in India is much lower as compared to international standards and presents a significant opportunity for telcos. 

In India, the wireline broadband coverage would largely expand through the fibre to the home (FTTH) networks which have the capability to deliver high speeds with stability in the network. "This will allow it to be the bedrock for content delivery to homes, thereby encompassing an umbrella of services including wireline voice, wireline broadband and television. Increasingly, the television industry is shifting towards content on demand and high-quality videos/content," he said.

ICRA said in a statement that India's wireline broadband subscriber base can increase to 100 million households over the next five years, and the revenue generation from these segments could expand to Rs 80,000 crore as against Rs 14,500 crore now from wireline voice, home broadband and DTH services, with the combined ARPU of Rs 875.

"In such a scenario, wireline broadband can be the next growth driver with the potential to subsume television/DTH services, also providing diversification from the mobile services revenues," ICRA said.

The penetration of wireline broadband is low in the country as of now and the subscriber base has not seen any meaningful traction over the years. As on September 2018, the subscriber base was only 18 million, accounting for less than 7 per cent of the total households, much lower than 44 per cent in Brazil and 99 per cent in France. In the television segment, while the total penetration is around 66 per cent of the total households, of this, around 65 per cent are provided over copper cable, on which the capability to provide high bandwidth services are limited and not fully developed.

Jagrani said, “Even at a penetration level of 30 per cent of the households, this could translate into subscriber base of 100 million by FY2024, generating revenues to the tune of Rs 80,000 crore. Correspondingly the revenue contribution from these services is expected to increase from current 8 per cent to around 30 per cent on an expanded revenue base."

As of now, the industry has fibre network of 17,20,000 route km. Much deeper and wider penetration is required to be able to meet the envisaged FTTH demand, which will encumber the financials of the telcos.

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